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Sunday, August 1, 2010

Sudan to double output, export sugar by 2014

By Opheera McDoom

KHARTOUM, July 30 (Reuters) - Sudan will double its sugar output to at least 1.5 million tonnes a year to become a net exporter by 2014, part of a larger plan to catapult the African nation into the world's top five producers, an official said.

Sudan was looking for investors to pump a total of $20 billion into the industry, which according to its master sugar plan could increase sugar production to between 10-14 million tonnes a year by 2020, said Mulhim Eltayeb, manager of Kenana Sugar Company's engineering arm, which created a sugar "master plan" already being implemented by the government.

"We are moving from a net importer to a net exporter in the next four to five years," Eltayeb told Reuters Thursday. "We are targeting 1.5-1.6 million tonnes (output) per annum by 2013/2014 -- we will have a surplus for export of about 200,000 T."

Sudan currently produces 750,000 tonnes per year of sugar but the government wants to propel the country into the elite of the sugar exporting world.

"We came up with a master plan for sugar production...with 12 different projects in Sudan to boost our production from our existing level...to about 10-14 million tonnes of sugar per annum," Eltayeb said.

"We are targeting to be one of the top five in the world."

With millions of acres of fertile land in Africa's largest country and abundant Nile waters, Eltayeb said Sudan was the most suitable regional country to develop the cane industry.

Exports would target markets in the European Union (EU), where demand is rising, Sudan's nine neighbours as well as the Common Market for Eastern and Southern Africa (COMESA) and the Arab world.

Eltayeb said Sudan ranked among the top in the world in terms of productivity with 45-50 tonnes of sugar cane per acre and it was the sixth cheapest country to produce the commodity.

"If you look at all the countries that produce cane, we are number six because we use supplementing irrigation," he said. "The top five are all dependent on rain."

INVESTORS NEEDED

He said Arab and Gulf nations were worried about food security and realising Sudan's potential to provide a solution.

Investors had traditionally shied away from Sudan, wracked by decades of civil war. But a 2005 north-south peace deal ended the major conflict and Khartoum implemented an Investment Act facilitating foreign investors who began to flood in.

U.S. sanctions, imposed since 1997, meant Sudan had to look east for help but did little to prevent economic expansion.

Sudan's $20 billion master sugar plan will involve utilising by-products to produce ethanol to the tune of 1 billion litres and 11.4 million tonnes of animal feed a year.

The plants would also integrate livestock along with the animal feed to produce 4.5 million tonnes of meat and 140,000 tonnes of dairy products a year.

Eltayeb said it was still possible by 2020 but depended on speedily securing investors.

"In terms of our capacity, in terms of land, water we have this available and still 2020 could be realistic for the next 10 years. It's just we need more commitment from the investors to invest in those projects," he said.

Kenana and Egypt's Beltone Private Equity firm this year created a $1 billion fund called Mahaseel which will be investing in agricultural projects mainly in Sudan.

Eltayeb said the expected return once the master plan was running at full capacity would be $30 billion a year.